Correlation Between Re Max and CBRE Group
Can any of the company-specific risk be diversified away by investing in both Re Max and CBRE Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Re Max and CBRE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Re Max Holding and CBRE Group Class, you can compare the effects of market volatilities on Re Max and CBRE Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Re Max with a short position of CBRE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Re Max and CBRE Group.
Diversification Opportunities for Re Max and CBRE Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RMAX and CBRE is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Re Max Holding and CBRE Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE Group Class and Re Max is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Re Max Holding are associated (or correlated) with CBRE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBRE Group Class has no effect on the direction of Re Max i.e., Re Max and CBRE Group go up and down completely randomly.
Pair Corralation between Re Max and CBRE Group
Given the investment horizon of 90 days Re Max Holding is expected to under-perform the CBRE Group. In addition to that, Re Max is 1.29 times more volatile than CBRE Group Class. It trades about -0.11 of its total potential returns per unit of risk. CBRE Group Class is currently generating about 0.22 per unit of volatility. If you would invest 12,565 in CBRE Group Class on October 20, 2024 and sell it today you would earn a total of 1,126 from holding CBRE Group Class or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Re Max Holding vs. CBRE Group Class
Performance |
| Timeline |
| Re Max Holding |
| CBRE Group Class |
Re Max and CBRE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Re Max and CBRE Group
The main advantage of trading using opposite Re Max and CBRE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Re Max position performs unexpectedly, CBRE Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CBRE Group will offset losses from the drop in CBRE Group's long position.| Re Max vs. Marcus Millichap | Re Max vs. Frp Holdings Ord | Re Max vs. Maui Land Pineapple | Re Max vs. Transcontinental Realty Investors |
| CBRE Group vs. Cushman Wakefield plc | CBRE Group vs. Newmark Group | CBRE Group vs. Colliers International Group | CBRE Group vs. Marcus Millichap |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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